pricing, product design, and advertising
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The market environment heavily influences corporate decision makeing ability. Discuss the difference in executive decisions concerning pricing, product design, and advertising between a company that exists in a perfectly competitive market and a company that lives in a monopolistic competitive market.
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Solution Summary
Contrast factors such as pricing, product design, and advertising.
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Market structure is typically modeled along a continuum with monopoly at one extreme and perfect competition at the other. You might imagine a market continuum as follows.
<<Perfect Competition Monopolistic Competition Oligopoly Duopoly Monopoly>>
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It is probably best to start with PERFECT COMPETITION. A perfectly competitive industry is characterized by three things.
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1) There are many firms in the market.
2) Firms produce an identical product.
3) There are no barriers to entry.
PRICE
Because of this we say firms operating in a perfectly competitive ...
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